The decision by federal Environment and Climate Change Minister Steven Guilbeault was made public Wednesday after markets closed.
I have determined that the designated project is not likely to cause the significant adverse environmental effects referred to in subsection 5(1) of the Canadian Environmental Assessment Act
he wrote.
At the same time, his ministry also issued a press release at the end of the day on Wednesday to announce that all future oil and gas projects must be carbon neutral by 2050
.
And this will be the case for Bay du Nord, confirmed Mr. Guilbeault in an interview with Radio-Canada.
Bay du Nord is a deposit that the Norwegian oil company Equinor and Cenovus Energy, a local partner, want to exploit. It is located in deep water in the Flemish Pass basin, about 500 kilometers east of Saint-Jean.
Equinor’s plan is to use a Floating Production, Storage and Offloading Unit (Floating Production Storage and Offloadingin English, or FPSO), a huge vessel capable of producing up to 200,000 barrels per day.
The project is scheduled to come on stream in 2028. Bay du Nord would thus become the fifth offshore oil field in production in Newfoundland and Labrador.
An unexpected windfall for a heavily indebted province
Bay du Nord represents $3.5 billion in royalties for the government of Newfoundland and Labrador – the most indebted province in the country – as well as thousands of well-paying jobs for its residents.
In Newfoundland and Labrador, all the federal and provincial deputies – with the exception of one – are behind Bay du Nord. Also, its rejection by Ottawa would have been perceived as a huge failure for the Liberal government of Andrew Furey, the oil industry representing approximately 30% of the province’s GDP.